Signals of Industrial Chain Restructuring Behind the Dual Growth in Wool Trade

China's wool textile sector posted a mixed performance in the first five months of 2026: total trade reached USD 6.06 billion, up 8.16% year-on-year. However, the real story lies in the widening gap between import and export growth—exports edged up just 2.29%, while imports surged 27.35%. This divergence signals structural shifts underway in the industrial chain.

Import Surge: Domestic Recovery and Stockpiling

The import spike is primarily driven by higher capacity utilization in domestic wool processing. Customs data shows cashmere raw material and product imports hit USD 127 million, a 44.61% jump. This is not accidental—companies are stockpiling ahead of autumn/winter orders.

Stable production in worsted and cashmere deep-processing sectors has boosted purchases of premium Australian and South African wool. Imports growing far faster than exports mean Chinese mills are locking in raw material costs to hedge against global price volatility. For buyers, this suggests potential cost pressure on finished wool products in the second half.

Export Divergence: Emerging Markets Drive Shift

The 2.29% export growth masks significant structural changes. Traditional European and U.S. markets show mixed results: German orders held steady, while volumes to Vietnam and Italy dipped but values rose, indicating pricing power.

The standout is emerging markets. Exports to India surged 40.19% to USD 76 million, and to Turkey 24.89% to USD 41.46 million. The main driver is wool tops—1-5 month exports totaled 13,300 tons worth USD 178 million, up 21.68%.

- This means India and Turkey are absorbing global textile manufacturing capacity, boosting demand for Chinese intermediate goods. For Chinese mills, this offers short-term gains but risks cultivating future competitors.

Category Performance: Cashmere and Wool Tops Lead

Products where wool and cashmere account for over 50% all rose. Wool product exports grew 5.11%, cashmere products 6.97%. Yarn and knitted sweaters saw stable overseas demand, underscoring China's competitiveness in finished garments.

The 44.61% surge in cashmere raw material imports is notable—it reflects not just demand but also rising imports of high-end cashmere fabric and apparel, signaling recovery in domestic luxury consumption. Domestic processors must accelerate upgrades to compete with imported premium products.

Outlook: Autumn Orders and Raw Material Costs

Industry consensus is that autumn/winter orders will sustain export resilience. But two risks loom:

• Rising raw material prices: international wool costs are climbing. Mills without locked-in purchases face significant margin pressure.
• Narrowing trade surplus: sustained faster import growth could erode the surplus, challenging overall profitability.

For Buyers - Monitor Australian and South African wool prices; lock in long-term contracts when costs are low to avoid peak-season premiums. - For cashmere orders, prioritize domestic suppliers with deep-processing capabilities to compete with imported high-end products.

For Exporters - Expand customer development in emerging markets like India and Turkey, where wool tops still have growth potential. - Guard against order shifts from traditional markets like Vietnam and Italy by enhancing product value to maintain pricing power.